Paradigm, a crypto investment firm, supports Roman Storm, a co-founder of Tornado Cash, in a court case. Paradigm filed a document in the New York district court on June 13, saying the jury needs to understand what the law says about being a “money transmitter.”
Tornado Cash is a tool that mixes cryptocurrency to make transactions private, but the US government says that Tornado Cash has broken the law by running it without a license.
As per the reports, the firm has argued that the government must prove Storm knowingly ran a business that charged fees, dealt with illegal money, and controlled the funds, but Tornado Cash doesn’t work that way; its developers don’t hold or control the money. Paradigm’s legal team, Katie Biber and Gina Moon, wrote that the government’s claims don’t match the law or past rulings.Â
They pointed to a 2014 decision that said making software is not the same as handling money, and a 2019 rule said that you are only a money transmitter if you control the crypto. The firm’s team is worried that if Storm is found guilty, it could scare software developers and harm innovation in tech, like crypto or artificial intelligence (AI).
The reason behind it is that the developers might get blamed for how others use their tools. It’s like blaming a phone maker if someone uses their phone for a crime. The trial starts July 14, and one charge against Storm was dropped after the government said it wouldn’t target crypto mixers for how users act.
In August 2023, Roman Storm and his Tornado Cash co-founder, Roman Semenov, were accused by the U.S. government of helping criminals “hide” over $1 billion in cryptocurrency using their platform, Tornado Cash, which mixes crypto to keep transactions private. Paradigm, a company supporting Storm, warns that if he’s found guilty, it could hurt new ideas in cryptocurrency, financial tech, AI, and open-source software.
They say it’s unfair to punish developers for how others use their tools, comparing it to blaming a phone company for illegal calls made on their phones. The trial is scheduled for July 14, 2025. One charge against Storm was dropped on May 15, 2025, after the government said it wouldn’t go after crypto mixers like Tornado Cash for what users do with them.
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